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Actors, Producers Suspend Talks

8 May, 2008 By: Erik Gruenwedel

The Screen Actors Guild (SAG) and Alliance of Motion Picture and Television Producers (AMPTP) have halted month-old contract negotiations after the producers said they wanted to start talks with the union representing daytime actors.

AMPTP began labor talks with American Federation of Television and Radio Artists (AFTRA) May 7.

The move was seen by some as a strategic ploy by producers to enact quickly a separate labor agreement that would increase pressure on SAG to come to a resolution on issues related to DVD residuals and new media, among others.

SAG and AFTRA traditionally negotiated labor contracts jointly but decided to bargain separately following a falling out over issues and tactics.

The current agreement between SAG, AFTRA and AMPTP expires June 30.

Peter Chernin, president and COO of News Corp., who played a pivotal role in ending the writers' strike in February, said producers are not seeking a quick fix resolution with AFTRA. Chernin said the studios want a deal that both rewards talent and allows companies to stay economically viable.

“That was our strategy with the writers and our strategy with the directors,” Chernin said. “It was certainly the strategy we had this week when we went into negotiations with SAG.”

SAG and AMPTP appeared headed toward an agreement last week after the actors reportedly agreed to drop demands to double royalties paid for DVD, among other provisions.

The actors said they would agree to a 15% increase to the 25-year-old DVD residual rate, which pays 3% for TV and 3.6% for movies of the producer's gross receipts, according to The Los Angeles Times.

The DVD residual rate has been a long running sore point among SAG management.

The AMPTP refused to double DVD royalties and other related labor costs it said would result in wage hikes approaching 200%.

The producers claimed the existing labor agreement for DVD should remain intact since it represented a mature business. Often considered by studios as peripheral in importance, budgets for bonus material have been curtailed in recent years as sales of DVDs matured.

“In such circumstances employers in other industries typically negotiate reductions and efficiencies to reduce costs,” the AMPTP said in a statement. “We are not seeking to do this.”

The actors also said they would agree in principle to the deal for new media worked out between the Writers Guild of America and producers in February, notwithstanding 70 changes.

Among the alterations is the issue of control and compensation for the use of video clips by studios and networks without actors' consent.

“[Our] objective is to keep the town working and get a fair contract, so we are gravely disappointed that we will now have to delay to a process that we started over three weeks ago,” said Doug Allen, national executive director and chief negotiator with SAG. “We modified our proposals in effort to narrow the gap between us, and now we need the AMPTP to do the same.”

The AMPTP said in a statement that significant differences remained on DVD residuals, streaming and new media use of clips and library material.

“With SAG's continued adherence to unreasonable demands in both new and traditional media, continuing negotiations at this time does not make sense,” AMPTP said.

DVD residuals figured to play prominently in the recent writers strike earlier this year but vanished from the bargaining table when producers offered terms on new media the WGA deemed the “best deal in 30 years.”

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